Sarasota County will exhaust budget reserves by 2016

A big deficit, questions about uncontrolled spending, warnings of a fiscal crisis. No, Congress is not back in session debating the federal budget.

The precipitous talk Tuesday came from some Sarasota County leaders discussing next year's proposed budget, as a process that seemed to be cruising toward a smooth conclusion next month suddenly encountered turbulence.

The county has relied on reserves to balance three out of the last five budgets, and such spending would ramp up considerably next year, depleting a substantial cash cushion and rattling some commissioners.

There is enough reserve money to fund the county's deficit spending for the next two years, based on current projections. But starting with the 2016 budget, there would be a $22 million gap between revenues and expenditures.

County Commissioner Christine Robinson raised questions about the strategy and also used the issue to again criticize County Administrator Randall Reid. Last month Robinson was vocal in complaining about Reid's communication skills and his handling of the departure of the county's top finance official.

“We're spending wildly here in this budget,” she said.

Robinson also contended the budget process has not been as open as it should be.

“I'm actually surprised we're at this point today,” she said. “It hasn't been a very clear budget process to me.”

Robinson said she is prepared to vote against the budget if changes are not made. She said deficit spending has increased since Reid was hired last year.

But other commissioners said they are comfortable with the plan to continue spending more money than the county collects.

“In my view we wait another year and see where we are,” said Commissioner Charles Hines.

Reid defended the proposed budget, which includes $4.2 million for employee raises, saying he believes it reflects what the majority of commissioners support.

If the county spends $27 million from reserves as projected in the budget, the fund will be down to $32 million heading into 2015, when it would then be exhausted.

But Commissioner Joe Barbetta said investing in economic development can grow revenues and help stave off future shortfalls. He pushed Tuesday for spending on projects ranging from a competitive BMX biking center to a youth baseball academy.

“You need to spend money to get money to come in,” Barbetta said.

Hines noted that the reserve money being budgeted is on top of another reserve fund that is set aside for true emergencies. He compared the excess reserves to business profits.

“We're not supposed to make a profit,” he said.

Another factor in the budget debate: The final amount spent from reserves has historically been much less than budgeted.

In 2012 the county budgeted to use $34.5 million from reserves but spent just $9.2 million. This year officials are anticipating spending less than half of the $33 million budgeted.

County budget director Steve Botelho said it is difficult to make budget projections into the future.

The $22 million deficit projected for 2016 could be significantly higher or lower, he said. The figure does take into account expected increases in tax collections from rising property values.

If the deficit does not change, balancing the budget in the future will require either a tax increase or deep spending cuts. Slashing $20 million in spending would require an $8 million cut to the sheriff's budget, $1.7 million to the county's bus program, $1.4 million from the parks department and $900,000 from libraries, among other reductions.

There seemed to be little appetite for major budget reductions, or even moves to rein in spending increases.

Only Robinson voted against a proposal to spend $4.2 million on employee raises next year. The commission also voted unanimously to put another $500,000 in the budget for a program to help the homeless.

Commissioners noted that Sarasota County has the third-lowest tax rate among Florida's 67 counties. They also highlighted the fact that they lowered the tax rate repeatedly during the real estate boom.

With the county facing the prospect of increasing its tax rate as soon as 2015, two of the current commissioners will no longer be in office at that time, and two will be preparing to leave due to term limits.

Hines would be gearing up for a second term, if he decides to run again. He hopes the county can grow revenues without raising the tax rate, but did not take an increase off the table.

“This will be an interesting conversation today and over the next couple of years,” he said.